As Dwaddle noted, transaction logs in MS SQL are binary, so indexing the actual log files will get you nowhere. You could however set up a scripted input into Splunk that runs a variation of DBCC LOG (<database>, <type>) and then index the output of that query in Splunk.
For some info on DBCC LOG see this site: http://www.mssqlcity.com/Articles/Undoc/SQL2000UndocDBCC.htm#part_2_8
Now I don't think you can actually filter on DBCC LOG so you probably have to put the results in a temp table and then work your mojo with them. I am also not sure how much extra load running this frequently would put on your system. Maybe you could just run it once a night, do your filters, and then index the results. Might be good enough for your auditors.
You could also use triggers or other SQL internal mechanisms to fire alerts.
I for one would sit down with my auditors and try to figure out why they want me to monitor the tranny logs and see if we couldn't agree on a little more efficient way of achieving what they want. For example indexing the web logs, or adding better logging to whatever custom apps hit your sensitive tables. Also restricting access as much as possible to your sensitive dbs/tables is a good way to go.
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