yes in Auditing secion if the userid\password is in correct they you will get error.
also, creating an ODBC connection will also refect error if any such issue.
For Auditing all activiy is though CMC->Auditing section.
CMS audits create audit files in the Auditing folder.
it uses Auditing Folder as temp folder and removes the files and writes in Auditing DB.
if the CMS fails to write anything in the Auditing DB the files size will keep on increasing in Auding folder.