The AD FS auditing subsystem could not register itself with the system. The auditing privilege is not held. The AD FS component ...

The AD FS auditing subsystem could not register itself with the system. The auditing privilege is not held. 

The AD FS component will not be able to start unless it is granted the auditing privilege. 

User Action 
AD FS components that write audits must be configured to run as LocalSystem, NetworkService, or a domain principal that has explicitly been granted the "Generate Security Audits" privilege (SeAuditPrivilege). 

If the failing component is the Federation Service, configure the application pool (AD FS AppPool) to run as an appropriate principal. 

If the failing component is the AD FS Web Agent Authentication Service, configure the Windows NT service to run as an appropriate principal. 

If the failing component is the AD FS Web Agent for claims-aware applications, configure the application pool for the protected application to run as an appropriate principal.