The best evidence to determine whether transactions have been executed by authorized employees is audit trails. Audit trails are secure records that catalog events or procedures to provide support documentation. They are used to authenticate security and operational actions, mitigate challenges, or provide proof of compliance and operational integrity2. Audit trails can track and trace the following information related to transactions:
Who initiated, approved, modified, or deleted a transaction
When a transaction occurred (date and time)
Where a transaction took place (location or device)
What type of transaction was performed (action or operation)
Why a transaction was executed (purpose or reason)
By analyzing audit trails, an IS auditor can verify whether transactions have been executed by authorized employees or not. Audit trails can also identify any unauthorized, fraudulent, or erroneous transactions that may have occurred. Audit trails can also help to resolve any disputes or discrepancies that may arise from transactions.
References:
What Is an Audit Trail? Everything You Need to Know

The correct answer is C. Periodically restoring backup media for key databases.
The most crucial control is to test restoration from backup media. A backup is not truly reliable until the organization proves that it can restore usable data from it. Periodic restore testing validates that backup media are readable, complete, current enough, compatible with recovery procedures, and capable of supporting recovery objectives.
ISACA guidance states that management should test restoring backups at least once a year and document the test. ISACA also states that organizations should regularly practice data recovery from backups, and that the only assurance that a backup is successful comes when the restore process is used to recover the data.
Option A is important for confidentiality, but encryption does not prove that data can be recovered. In fact, poor key management could prevent recovery.
Option B is important for availability because offsite storage protects backups from local disasters, but offsite storage alone does not prove that the backup media are usable or restorable.
Option D is important for tracking and locating media, but inventory accuracy does not prove that the data on the media can be restored.
This maps directly to Domain 4 because ISACA's CISA Exam Content Outline includes Data Backup, Storage, and Restoration and the task of evaluating storage, backup, and restoration policies and processes.
References: ISACA CISA Exam Content Outline, Domain 4; ISACA backup and recovery guidance; ISACA guidance on backup restore testing.