I would respond as best I could if they were my girls. I think if both you and your husband are there the he said/she said accusation thing is less likely to happen. Your husband wouldn't tell the mother on himself. Your friend is likely to know the truth in herself once she thinks and looks at it like you have and you could be very supportive and helpful to her being a safe place for her daughters while she works it all out.

I agree it could get ugly for you and your family for awhile though but I would feel better facing any possible difficulties than pretending there aren't any. It is possible if your friend/neighbor eventually finds out or if the little girl "remembers" later in life that the change in you all's behavior toward her and the family could make you all look suspicious in someone's eyes. I would act first rather than have to respond from a harder place later and feel all the fear and uncertainty until that happens.

You and your husband need to have faith in yourselves and your knowledge of who you each are and project that. Your husband is not a child molester. There isn't anything in his bearing, manner, behavior, etc. or your own children's lives that would suggest that.