We introduce TRACE (Trustworthy Reasoning from Acoustic Cues and Evidence), a benchmark for diagnosing the reliability of large audio-language models (LALMs) by revealing when, and under what acoustic conditions these models behave untrustworthily. Existing benchmarks primarily measure whether a model produces the correct answer, but correctness alone cannot determine whether the answer is grounded in acoustic evidence or instead reflects language and contextual priors. TRACE evaluates model behavior along three complementary dimensions: (1) task performance, whether the answer is correct; (2) evidence alignment, whether the model is attending to the audio regions required to answer the question; and (3) robustness, whether answers and attributed evidence respond coherently to controlled changes such as event order, overlap, signal-to-noise ratio, or background content. TRACE targets temporal ordering, counting, and event existence, three tasks that remain challenging for current models. We synthesize contextually informed acoustic scenes that allow us to test whether models hallucinate events associated with the context but absent from the audio. This synthesis also allows us to obtain a scalable benchmark for which we know the answers by design. For each scene, we create controlled variants in a programmatic way to stress-test model robustness. We introduce attribution-based metrics that quantify model attention at scale on target events and non-target events. Evaluation across five state-of-the-art models shows that current LALMs often detect where relevant sound evidence occurs, but they do not reliably interpret it, integrate it into the answer, or respond to controlled changes in that evidence. Our benchmark also shows that models still struggle the most with ordering and counting questions.

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