diff --git a/src/Sql/Sql/Auditing/Services/AuditingEndpointsCommunicator.cs b/src/Sql/Sql/Auditing/Services/AuditingEndpointsCommunicator.cs
index 961a874a934e..1c4996318d6a 100644
--- a/src/Sql/Sql/Auditing/Services/AuditingEndpointsCommunicator.cs
+++ b/src/Sql/Sql/Auditing/Services/AuditingEndpointsCommunicator.cs
@@ -223,12 +223,15 @@ public DiagnosticSettingsResource UpdateDiagnosticSettings(DiagnosticSettingsRes
         public Guid? AssignServerIdentityIfNotAssigned(string resourceGroupName, string serverName)
         {
             var server = GetCurrentSqlClient().Servers.Get(resourceGroupName, serverName);
-            if (server.Identity == null ||
-                server.Identity.Type != ResourceIdentityType.SystemAssigned.ToString())
+            if (server.Identity == null)
             {
                 server.Identity = ResourceIdentityHelper.GetIdentityObjectFromType(true, ResourceIdentityType.SystemAssigned.ToString(), null, null);
                 server = GetCurrentSqlClient().Servers.CreateOrUpdate(resourceGroupName, serverName, server);
             }
+            else if (server.Identity.Type != null && server.Identity.Type.Contains("UserAssigned")) 
+            {
+                return null;
+            }
 
             return server.Identity.PrincipalId;
         }
diff --git a/src/Sql/Sql/Auditing/Services/SqlAuditAdapter.cs b/src/Sql/Sql/Auditing/Services/SqlAuditAdapter.cs
index 356d5a86ea36..2b14ed6c4e29 100644
--- a/src/Sql/Sql/Auditing/Services/SqlAuditAdapter.cs
+++ b/src/Sql/Sql/Auditing/Services/SqlAuditAdapter.cs
@@ -352,7 +352,10 @@ internal virtual void PolicizeStorageInfo(AuditModelType model, ProxyResource po
             if (AzureCommunicator.IsStorageAccountInVNet(model.StorageAccountResourceId) || model.UseIdentity == BoolType.True)
             {
                 Guid? principalId = Communicator.AssignServerIdentityIfNotAssigned(model.ResourceGroupName, model.ServerName);
-                AzureCommunicator.AssignRoleForServerIdentityOnStorageIfNotAssigned(model.StorageAccountResourceId, principalId.Value, RoleAssignmentId);
+                if (principalId != null)
+                {
+                    AzureCommunicator.AssignRoleForServerIdentityOnStorageIfNotAssigned(model.StorageAccountResourceId, principalId.Value, RoleAssignmentId);
+                }
             }
             else
             {
diff --git a/src/Sql/Sql/ChangeLog.md b/src/Sql/Sql/ChangeLog.md
index c1bba8b7d3e1..0bf0c849fda3 100644
--- a/src/Sql/Sql/ChangeLog.md
+++ b/src/Sql/Sql/ChangeLog.md
@@ -19,6 +19,7 @@
 -->
 ## Upcoming Release
 * Added an optional parameter `HAReplicaCount` to `Restore-AzSqlDatabase`
+* Enabled support for UserAssignedManagedIdentity in Auditing
 
 ## Version 4.2.0
 * Added a parameter named `UseIdentity` for `Set-AzSqlServerAudit`, `Set-AzSqlDatabaseAudit`, `Set-AzSqlServerMSSupportAudit`