This security setting determines whether the OS audits each time this computer validates an account's credentials.
Account logon events are generated whenever a computer validates the credentials of an account for which it is authoritative. Domain members and non-domain-joined machines are authoritative for their local accounts; domain controllers are all authoritative for accounts in the domain. Credential validation may be in support of a local logon, or, in the case of an Active Directory domain account on a domain controller, may be in support of a logon to another computer. Credential validation is stateless so there is no corresponding logoff event for account logon events.
If this policy setting is defined, the administrator can specify whether to audit only successes, only failures, both successes and failures, or to not audit these events at all (i.e. neither successes nor failures).