This is always a contentious issue. By and large, I would say that it all depends on the situation as to whether you should learn your lines or not. The default reasoning to me is;
a) If you are being asked to perform your own monologues, then they must be learnt ahead of time, and well - there is nothing less convincing for a panel to see than you being unable to get through your OWN choice of speech. On the other hand, they may well not know all the ins and outs of that precise piece in the way they would know a speech they have written/are specifically casting for, so there is leeway for you to be imprecise if you have to be - you must just always be thinking ahead if you dry.
b) If it's a theatre audition, and you have been presented with a large number of script excerpts, then I think it is valid to argue that you can't possibly learn all the material convincingly ahead of time. You must be familiar with it, and work as far as possible off the page, but any good theatre practitioner will NOT be expecting a finished performance which can only come in rehearsals as Allan says.
c) If it is a script for screen, you are, however, in a different situation - if you have been sent sides ahead of time (i.e. the specific material that the company wish you to audition with), you have to have it down. That is all there is to this. Screen work is at such a fast rate of turnover that they will simply not employ you if they think you cannot condition yourself to learning the lines ahead of time; also, on camera, the response is always to immediacy of performance, which is extremely difficult to attain if you don't come in off book. BUT you should always take the script in with you, just in case you dry and need to refer to it - this is not frowned upon by any CD - in fact, they will appreciate that you have taken the effort to try and work on the material.
d) Many screen auditioners, however, prefer to see you 'cold read' from the script in hand, anyway, and there is no way to prepare for this, other than to make sure that you can take words off the page quickly and convincingly while playing to screen.
I find that very often the best thing to do with any director/production team you are DIRECTLY in contact with is to ask them specifically how they would like you to prepare for the audition if they haven't let you know, or to get an agent etc. to try and determine this on your behalf. It is your professional right as far as I am concerned to be able to prepare for the audition appropriately, because it is in everyone's best interests that you do a good job on the day...and finding out specifics often takes the sting out of the preparation process! You go in confident that you know what they are looking to see!