Meek, CPA, discovers that an audit client has a pending lawsuit against it for a significant sum of money. If the lawsuit is lost, the client's assets will be reduced by a substantial amount. Meek suggests to the client that a contingent liability should be disclosed in the audited financial statements. The client objects for two reasons. 1. The subject of the lawsuit is highly sensitive. Revealing its contents would be a breach of the auditor's rule on confidential client information. 2. Disclosure of the liability in the financial statements would provide the plaintiff with evi- dence of admission of a liability. Disclosure of the liability could damage the client's case in the lawsuit. Required: Reply to both of the client's points.