Since i cannot use the audible app on my 5.1.1 IOS Ipod touch. this is what i did in order to read my audiobook on my ipod touch using Itunes 12. Hopefully it will help someone.
connect your ipod to the computer, and it should open up itunes. double click the audible file (aax file), and it
should open the book in itunes. then click on ... (the 3 dots) in itunes or icon that looks like a book to open up
my audiobooks, then beside the name of the book you want to add, click on the ... (the 3 dots) and then click on add to ipod. This will put the file on your ipod. this will add the book to your ipod library. I like to put it in a specific folder to make it easy for me to locate in "my music". You may not have to do this step, if you can easily find the book on your ipod.
To add a folder, click on the arrow to the left of your Ipod in Itunes. at bottom left of itunes there is a plus sign. click on that, and choose "new playlist"..name it something easy to remember where that book is. then drag the audible file to that folder.