This study examines how regulatory friction in the market for skilled audit labor affects audit outcomes. Audit firms face persistent staffing shortages and increasingly rely on foreign-born auditors hired through the H-1B program . However, H-1B hiring of auditors is subject to regulatory friction via annual caps and a regulated randomized selection process, leaving audit offices’ demand for foreign auditors often unmet. By exploiting office-level variation in the shortfall between audit offices’ demand for versus the realized supply of H-1B auditors, we identify a regulatory wedge in access to specialized human capital . Offices with larger wedges exhibit lower audit quality, with stronger effects during the busy season and in offices that rely more on foreign hiring. The detrimental effect of regulatory wedges is attenuated by proximity to other offices within the same audit firm. We further find that larger wedges are associated with lower audit fees, with no effect on audit production timing. These findings unveil how regulatory frictions constraining access to skilled labor can impair audit quality, underscoring the critical role of labor supply regulation in professional service markets.