I suggest you get another job, considering that this guy is crazy. You’re going to spend your lifetime having him micromanage your processes running every second of the servers lifetime.
File audits work best for few files, not the entire file system. Your logs are going to be so full and it’s going to be absolutely useless to anyone because no one will have time to read it/parse it.
If you do get him convinced that to lighten up on his requirement and focus on the important directories such as the financial records of the company and proprietary information, a package like GFI’s LanGuard SELM will audit the server and workstations logs for accesses not only for file access, but also the entire Event Log, if desired. You will have to manually set up some rules for the types of events you are looking for, but that’s easy once you have a reasonable goal in mind. I don’t know file access Events off the top of my head, but it’s easy enough to figure out.