Reportedly spotted setting (5)
I believe the answer is:
scene
'setting' is the definition.
(I know that setting can be written as scene)
'reportedly spotted' is the wordplay.
'reportedly' indicates a 'sounds like' (homophone) clue.
'spotted' becomes 'seen' (I've seen this in another clue).
'seen' sounds like 'SCENE'.
(Other definitions for scene that I've seen before include "View, landscape" , "site" , "Setting - carry-on" , "Subdivision of a play/film" , "Vista or stage setting" .)