Literacy refers to reading and writing.
One of the biggest foundations of literacy skills is in being good at skills such as identifying rhyme, sounds in words, blending sounds to form words. If your child has trouble with these skills, he or she is very likely to have trouble with auditory processing.
It is important to seek help immediately from a specialist tutor or speech pathologist who has experience in working with children with literacy difficulties. The earlier your child gets help, the better the outcome will be.