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Auditing Problems - Only some folders and subfolders and files are applying my changes

When selecting auditing for a folder with multiple subfolders and files, auditing looks like it has completed. However when inspecting files and folders below the main folder, not every item has the new Auditing entries.  I select the "reset on all child objects" option but it still does not apply to everything.  Any Ideas on what might be happening.  It defeats my whole purpose for doing this.
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JammyPak
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I have tried the "allow inheritable auditing" both ways. Also, I am able to select a file deep in the tree and apply the audit, so its not a rights issue. Also, this is a public folder.
did you get this to work?