In the course of auditing the financial statements of the Lowe Company for the year ended December 31, 19X2, you request that your client's attorney furnish a legal representation letter. The attorney's letter includes information on unbilled legal fees and comments on specific litigation identified in the client's request. However, with respect to other "claims, lawsuits in process, threatened or pending litigation" of which the attorney has knowledge, the attorney has responded: "This firm does not disclose information privileged under the attorney/client privilege, but if such information were disclosed, it would be material." Explain the impact that this response will have on your audit report and write the audit report appropriate in the circumstances.