Observed setting for audition (4)
I believe the answer is:
seen
'observed' is the definition.
(synonyms)
'setting for audition' is the wordplay.
'setting' becomes 'scene' (I've seen this before).
'for audition' shows a homophone (sound like) (audition can mean hearing).
'scene' sounds like 'SEEN'.
(Other definitions for seen that I've seen before include "Witnessed" , "Observed or percieved" , "Distinguished" , "Noticed" , "Perceived by sight" .)