You can turn auditing severaldifferent ways, if you have SharePoint Server in my opinion I would audit atthe document level. This would require using content types and placeauditing on them. This will give you the freedom to place differentauditing on different types of documents. You set auditing when youcreate the content type.
This is done from Site Actions… Site Settings… UnderGalleries click Site Content Types…
Once here click create…
Name your content type
Set your content types parent, in this clase in the”select parent content type from” drop down click “documentcontent types”
In the parent content type box for this example selectdocument, select a group if you want… click OK
If you have now you should see a link under settings whichare for Information Management Policy settings… click this link.
Now you will see a check box for Auditing… select this andthe page will reload with you auditing settings. You would make use ofthis by now using the content type in a doc lib or which ever type you want.
Another way of setting auditing is to set it at a sitecollection.
You need to be on the root of your site collection to beable to do this, click on Site Actions… Site settings…
Under Site COllection Administration click Site COllectionAudit settings. This will set auditing for the entire site collection.