The jboss-logging.xml needs to be updated with the appender as:

==============
<!-- Category specifically for Security Audit Provider
-->
<logger category="org.jboss.security.audit.providers.LogAuditProvider" additivity="false">
<level name="TRACE"/>
<handlers>
<handler-ref name="AUDIT"/>
</handlers>
</logger>
==========

Then validate the security audit feature: http://server.dzone.com/articles/security-auditing-jboss