For KPMG, another week, another rebuke from UK accounting regulators.

KPMG was fined £2.1m by the Financial Reporting Council (FRC) following its admission of misconduct on Ted Baker’s financial statements in 2013 and 2014. In addition, a KPMG partner, Michael Francis Barradell, was reprimanded by the regulator and fined an additional £46,800.

The misconduct arose from KPMG providing expert witness services to Ted Baker in a London lawsuit, the FRC said. This was in breach of ethical standards and led to the loss of KPMG’s independence in respect of the company’s audits.

"Ethical standards are critical in supporting the confidence that third party users can reasonably have in financial statements in circumstances where, of necessity, they only have incomplete information to judge whether the auditor is in fact objective," Claudia Mortimore, interim executive counsel at the FRC, said in a statement. "Where those standards are breached such that the auditor’s independence is lost, user confidence is likely to be undermined."

The penalty is the latest blow to an accounting firm already reeling from severe critiques of its work. In June, the regulator issued a stark warning that KPMG’s audit work is unacceptable, days after it was fined £3.1m for its 2013 audits of technology company Quindell.

The FRC is ramping up misconduct fines after being rebuked by legislators irate at the failure of the accounting industry to prevent several high-profile corporate collapses

"These stories just don’t go away," said Atul Shah, a professor of accounting at the University of Suffolk.

KPMG’s UK media office said the firm’s audit opinions on Ted Baker’s financial statements had not been called into question. KPMG continually sought to review and improve its processes and in 2017 decided not to undertake expert witness work for any company audited by KPMG UK, according to the e-mailed statement.

The firm’s fine was reduced from £3m because it settled the case. Similarly, Barradell’s fine was cut from £80,000.

The accounting watchdog is ramping up misconduct fines after being called useless and toothless by legislators irate at the failure of the accounting industry to prevent several high-profile corporate collapses. Legislators repeatedly complained that lax accounting has contributed to some of the UK’s biggest corporate scandals. The UK’s Association of Accounting Technicians has also called for fundamental changes.

In June, the FRC said KPMG’s audit work in the UK was of an unacceptable standard, adding that auditors did not challenge management enough, were not sufficiently sceptical and were inconsistent in their execution of audits. The decline in quality over the last five years "is unacceptable and reflects badly" on efforts by previous leadership to improve the work, the watchdog said.

KPMG’s trouble is not limited to the UK. A number of financial institutions in SA, include Absa and asset manager Sygnia, have cut or diminished their ties with KPMG recently, following a spate of revelations over the past 18 months.

The Bank of England’s Prudential Regulation Authority raised questions with financial institutions and other regulators to see whether there were risks to KPMG following criticism of its work for UK contractor Carillion and in SA, the Financial Times reported in July, without saying where it got the information.

With Jonathan Browning.