Watford are being investigated by the Football League for allegedly supplying false financial information.
The Telegraph newspaper claims it has obtained a forged bank letter submitted when Gino Pozzo became the Hornets owner before the 2014-15 campaign.
Watford won Premier League promotion that season, and could have points deducted or be fined if they are found to be at fault.
Watford told the Telegraph they are carrying out an internal investigation.
An EFL spokesman confirmed it had started an investigation into "serious allegations" and had contacted the club after receiving information from the newspaper.