IT'S war. KPMG has just nabbed Rentokil's lucrative contract for internal auditing from arch rival PricewaterhouseCoopers — by offering a 30% discount to the PwC price. The new deal means KPMG will undertake the tasks involved in an external audit, while also offering advice on internal audit issues — and that's big news in the, er, fun world of accountancy.

PwC quickly hit out with a veiled punch at its rival. The firm's audit chief Richard Sexton snapped back: “The UK ethics model relies on a risk and safeguard analysis. It is vital that we maintain our independence from — and in no way are seen to act as part of — management infrastructure.”

* KPMG are investigating an overspend of £100 million by the London Development Agency on buying land for the Olympics. Two senior members of staff have been suspended from the LDA's Olympic Legacy Directorate. Attempts by Labour Members of the London Assembly, including John Biggs, to hold Boris Johnson to account over the matter have hit a snag: the spending related to 2005-2007 — before Boris was elected. “I feel savaged by a dead sheep,” says Boris, “mounting this criticism when John Biggs was actually sitting on that LDA Board during the relevant period and was actually on the LDA's Olympic Delivery Committee. I just think it is amazing.” Biggs insisted: “There was no overspend of this kind identified under my stewardship.” To which Boris retorts: “That is for sure. That is the problem.”

Not nice enough for Goldman

GOLDMAN Sachs reportedly pondered suing Matt Taibbi, the Rolling Stone reporter behind the now notorious “great vampire squid” line for his lengthy piece about the bank “Inside the Great American Bubble Machine.” What for? asks Taibbi on his blog. “I'm not exactly sure what the grounds would be. Being annoying? Covering finance without a nice enough tie?”

* SO, former Goldman Sachs boss Hank Paulson and then US Treasury Secretary spoke to current Goldman boss Lloyd Blankfein two dozen times in the week the bank got a $13 billion bailout relating to AIG. The New York Times asked Paulson to explain himself and reports: “Michele Davis, a spokeswoman for Mr Paulson, said that the former Treasury secretary was busy writing his memoirs and that his publisher had barred him from granting interviews until his manuscript was done.” How convenient.

* JUST how much of Paulson's pension and investment portfolio is still tied up in Goldman?

* THERE's a surprise: Simon Fox has ruled himself out of the ITV chief executive job. Since news leaked that Fox, the boss of HMV was in the running for the post, he has been fawned over as a successor to Michael Grade. This, despite Fox having no previous broadcasting experience. The suspicion has to be that he was never a serious contender and the removal of his name makes it more likely that having dabbled outside the industry, the ITV board will fall back upon an insider, probably Tony Ball, the ex-BSkyB chief.

Flaw in Myners' bonus plan

DOES Lord Myners' ill-thought out plan to get the names of the City's big bonus hunters extend to those firms who stick to their statutory duty and report the bare minimum of financial information? City Spy would like to hear just how the City minister plans to get any form of meaningful detail from JP Morgan Cazenove, for instance, where the earnings of its heavy-hitter (he's just about the leading rain-maker in the entire City at the moment) Ian Hannam could be especially mouth-watering...

* “UK Grocers Wage Price War, Yet Most Can Declare Victory” runs the headline in the Wall Street Journal. Of course, if it was truly a price war rather than just a series of marketing gambits aimed at giving the impression of intense competition, most could not “declare victory” — could they?

* REACH for your metal detector. Bernie Madoff's home in the Hamptons is about to go up for sale, and treasure-hunters who believe the fraud must have some of his millions stashed away somewhere are flocking to the estate to look for buried silver…

Annual report fails to sing

RICHARD Peskin, the former chairman of Great Portland Estates, liked to hide in the text of his chairman's annual review, the names of pop songs and groups. In 2008, his last before retiring, he managed to bury references to 33 number ones from the 1960s. Nobody noticed, but City Spy can't help thinking that defeats the object and perhaps, sadly, says much about how closely people pay attention to reviews in annual reports… Still, does any other chairman/CEO do something similar?

* WHO is the former Lehman banker in London, who, according to Tatler, when he got divorced, gave his ex-wife all his other assets and kept his Lehman shares, only to find himself bust?

* WHY the stripes? The article relates how Lehman boss Dick Fuld disapproved of the beard worn by the bank's London spokesman, Andrew Gowers. Fuld also “only liked men to wear a dark suit and a white shirt — although stripes were considered all right in Europe.”

* WHEN Barclays came in and grabbed the US bits of Lehman, the soon-to-be unemployed Lehman bankers in London had to watch by video-link as their New York colleagues were celebrating because the sale meant they would get their bonuses. Eight of them got $25 million each. “We asked them if they could put $100 each into a hat so we could at least pay our secretaries, but they refused,” says one former senior member of Lehman Europe. Shortly afterwards the video connection and email were switched off.

* FROM the Investment Review of M&G's High Income Investment Trust: “Stock market weakness was especially pronounced during the autumn of 2009 as the full severity of the recession and the challenges facing the banking system became apparent ...”