A more thorough explanation:

An audit letter is a written request for information about a person or entity being audited. This request is usually sent to an attorney, banker, or other relevant party who may have information about the audited entity's financial situation. The audit letter may also ask for information about any pending or threatened litigation involving the audited entity.

Once the recipient of the audit letter provides the requested information, they may send a response directly to the financial auditors. This response is called an audit-letter response and should comply with the American Bar Association's Statement of Policy Regarding Lawyer's Responses to Auditors' Requests for Information.

Suppose a company is being audited by a financial firm. The auditors may send an audit letter to the company's attorney, requesting information about any pending or threatened litigation involving the company. The attorney would then provide a response to the auditors, detailing any relevant information about the litigation.

Another example could be an audit letter sent to a bank, requesting information about a person's financial situation. The bank would then provide a response to the auditors, detailing the person's account balances, transactions, and any other relevant financial information.

These examples illustrate how an audit letter is used to gather information from relevant parties during an audit process.