A managing partner was accused of forging an outgoing partner's signature on audit reports. It was never proven.

Two chartered accountants ran a forensic and statutory audit practice together, one of them drawing a large majority of the profits. When the smaller partner resigned, he accused the other of forging his signature on audit reports the firm had filed with a bank.¹

What happened#

Two pieces of documentary evidence decided the case, and neither helped the complaint.

The first was a forensic audit report of a third company that the outgoing partner said had been forged by an office employee on the managing partner's instruction, based on what a former article trainee had told him. The Board compared the signature on it with the outgoing partner's signature on his own Form-I registration and found the two "apparently matched" (para 12).

The second was correspondence with a bank. The outgoing partner had written to two branches of a public-sector bank asking for the original copies of five forensic audit reports, saying his signature on them had been forged. The bank replied that the signatures were his, but added that without KYC records for every partner and employee of the firm, it could not verify who had actually signed. It also declined to hand over the reports themselves, treating them as its own records (para 13).

The charge#

• Item (2) of Part IV, read with Section 22 — the First Schedule's residual clause for other misconduct, used when the conduct alleged does not fit one of the specific duties listed elsewhere in the Schedule.²

The complaint went well beyond the forgery allegation. It also accused the managing partner of withholding the outgoing partner's share of profits and conveyance expenses, refusing to accept his resignation, and using improper means to win audit assignments from nationalised banks and government companies. All of it was examined under this one clause, and all of it failed for the same reason: no evidence beyond the accusation itself.

What the respondent said#

The managing partner's defence was that every one of the seven forensic audit reports at issue had been signed by the outgoing partner himself and handed to office staff for dispatch to the banks concerned, with the office copies kept locked inside the outgoing partner's own cabin — a claim backed by an affidavit from the office administrator (para 4).

On the two reports referred to the CBI, he pointed out that both had been signed by the outgoing partner and countersigned by another partner, and that the investigating officer had summoned both of them as witnesses under Sections 160 and 161 of the Code of Criminal Procedure. When the outgoing partner later wrote to the managing partner describing the statement he had given to the CBI, he said he had not personally carried out the audit work — but at no point denied signing the reports (para 6). Forgery, the managing partner argued, was in any case a criminal allegation outside the Institute's jurisdiction (para 7).

On the money and the resignation, he denied owing any profit share or conveyance reimbursement, and denied ever refusing to accept the resignation — the outgoing partner, he said, was staying on of his own will only to settle an advance. He also denied any malpractice at the firm, noting it had never been blacklisted by any regulator, and said a separate complaint of his own was already before the Institute over the outgoing partner's conduct after leaving, including allegations of extortion, withheld client documents and an unpaid advance (para 8).

What the Board held#

On the forgery allegation, the Board weighed what evidence the outgoing partner had actually produced. The one report he placed on record bore a signature that matched his own Form-I signature (para 12). The bank correspondence confirmed the signatures on the other reports were genuinely his, and the Board noted that the bank's inability to verify authenticity stemmed only from a lack of KYC data on the firm's partners — not from any finding that the signatures were forged (para 13). On the money and resignation, it found nothing beyond a single email asking for information about the profit share, and a resignation letter that gave age, health, the pandemic and commute as the reasons for leaving, with no mention of forgery or unpaid dues (para 14). Five further allegations of malpractice were listed but none carried supporting evidence (para 15).

At the hearing the outgoing partner told the Board he had nothing more to say and would accept its decision, and that he agreed with the Institute's original screening opinion (para 16). The Board concluded:

in absence of any corroborative evidence for any charge against the Respondent, in the considered opinion of the Board, the Respondent is 'Not Guilty' of Other Misconduct falling within the meaning of Item (2) of Part- IV of First Schedule to the Chartered Accountants Act, 1949 (para 17)

The order#

Accordingly, the Board passed an order for closure of the case in terms of the provisions of Rule 15 (2) of the Chartered Accountants (Procedure of Investigations of Professional and Other Misconduct and Conduct of Cases) Rules, 2007 (para 17)

No punishment stage follows a not-guilty finding. The Board closed the complaint outright.³ It had earlier declined to accept the Institute's own screening opinion and ordered the full inquiry itself, before reaching the same conclusion on the merits.⁴

Why it matters#

This section is ours, not the Board's.

A bank confirming a signature is yours is not the same as it confirming who else could have used it. The bank here said the signatures matched the outgoing partner's, and that alone sank the forgery claim — the missing KYC data it also mentioned was not read as suggesting forgery. Do not expect a "we can't fully verify" caveat to carry a claim it was never meant to support.

A resignation letter is read literally, later. The letter here gave age, health, the pandemic and commute as reasons for leaving. When forgery and unpaid dues were raised only afterwards, the Board treated the letter's silence on them as evidence against the claim. Write your real reasons into the letter if you expect to rely on them later.

Naming the criminal-law question does not settle the professional-misconduct one. The managing partner argued forgery was a matter for the courts, not the Institute — but the Board still examined the evidence on its own merits rather than declining jurisdiction. A disciplinary body will look at the same facts regardless of what else they might also support.

This summarises a public order and links the primary source. It is general information, not legal or professional advice.