In wireless ad hoc network, packet loss is a serious issue. Either it is caused by link errors or by malicious packet dropping. The malicious nodes in a route can intentionally drop the packets during the transmission from source to destination. It is difficult to distinct the packet loss due to link errors and malicious dropping. Here is a mechanism which will detect the malicious packet dropping by using the correlation between packets. An auditing architecture based on homomorphic linear authenticator can be used to ensure the proof of reception of packets at each node. Also to ensure the forwarding of packets at each node, a reputation mechanism based on indirect reciprocity can be used.