* Pressure on fees raises audit quality concerns
* Chinese firms rise up the rankings
By Huw Jones
LONDON, Jan 29 (Reuters) - Deloitte has pipped rival PwC to become the world's top accountant by revenue in the face of rising pressure on fees and new rules boosting competition, a global survey showed.
The International Accounting Bulletin said Deloitte , PwC, KPMG and EY, dubbed the Big Four, still dominate the sector with over two-thirds of the market, dwarfing the combined 33 percent share of mid-tier firms like BDO and Grant Thornton.
Deloitte reported fee income of $32.4 billion last year, just ahead of PwC with $32 billion. EY came third with $25.9 billion and then KPMG with $23.4 billion.
Deloitte's lead may be temporary as PwC awaits regulatory approval for its takeover of Booz & Co, which would bump up its revenues by more than $1 billion.
Market share figures will be closely watched by European regulators in coming years as they put pressure on listed companies to switch accountants more frequently, to avoid cosy relationships that could blunt skepticism.
So far the switching has occurred between the Big Four in Europe ahead of a new law, from around 2016, when accountants must be changed every 10-20 years.
"Many mid-tier leaders feel the EU reform has not gone far enough to increase competition in the audit market and believe... they are likely to only rotate among the big firms," the IAB annual survey said.
Smaller accountants are likely to pick up more advisory work because of the reforms which also limit Big Four income from non-audit services, the survey said.
The revenue gulf between the Big Four and next tier down remains huge, with income at BDO totalling $6.4 billion and Grant Thornton at $4.5 billion.
The IAB survey looked at 50 top firms which this year included three new entrants, two China-linked Shinewing and Key Will Group, a sign of how homegrown challengers are emerging from the world's second biggest economy.
Revenues in the sector grew about 3 percent overall but downward pressure on accounting fees increased, leaving firms worried about audit quality, a concern echoed by regulators.
Accountants said the pressure was due to customers struggling to see the value of auditing, undercutting by rival accountants as a tactic to retain auditing work, and the Big Four bidding for work from smaller customers, the survey said.