A more thorough explanation:

An audit-letter response is a letter that an attorney provides to a client's financial auditors, usually at the client's request. The letter contains information regarding matters such as pending or threatened litigation. The purpose of the letter is to help the auditors understand the legal risks associated with the client's financial statements.

For example, if a company is being sued for breach of contract, the company's attorney may provide an audit-letter response to the auditors. The response would explain the details of the lawsuit, the potential financial impact on the company, and any other relevant information that the auditors need to know.

Audit responses must comply with the American Bar Association's Statement of Policy Regarding Lawyer's Responses to Auditors' Requests for Information, which was published in December 1975. This policy ensures that the information provided in the response is accurate and complete.