A growing number of U.S. companies are looking to India's information-technology outsourcing firms to cut the cost and time needed to comply with the Sarbanes-Oxley corporate-governance law, analysts, consultants and Indian entrepreneurs say.

The Sarbanes-Oxley rules require U.S. public companies to report on the strength of their internal financial-reporting controls, to better prevent fraud and ensure the accuracy of financial filings. More than a year into the gradual implementation of the law, companies have said compliance is costly and complicated. Some Indian outsourcing companies say their Sarbanes-Oxley-related business is growing more than 50 percent a year, aided by costs that in some instances are a third those of the big U.S. accounting firms.

Public companies in the United States spent about $5.5 billion last year to comply with the new law, and are likely to spend $5.8 billion this year, according to AMR Research, a technology research firm in Boston.

While most of the spending will go to internal and external auditors at large U.S. accounting firms, more than a quarter of it will pay for new technology and systems, analysts say, and it is that business for which the Indian companies are competing.

While a lack of understanding about exactly what Sarbanes-Oxley requires still makes it difficult for offshore companies to complete the most complicated steps of compliance, much of the new technology needed for automation and testing can be acquired abroad, said Sanjay Anand, chairman of Clifton, N.J.-based Sarbanes-Oxley Group LLC, which trains and certifies auditors on Sarbanes-Oxley compliance.

"In 2004, we saw a lot of business being done on site, but now we are getting into year two and year three and there will be more of the technology components of compliance offshored," Anand said.

Indian outsourcing firms say they are helping with each step of compliance They design and manage huge databases needed to keep track of the growing number of receipts, approvals and other bits of paper companies must store for years. They write the internal audit reports needed to explain how the systems work. They upgrade their clients' systems and test them.

On Tuesday, Infosys Technologies Ltd., one of India's largest outsourcing companies, said Sarbanes-Oxley-related orders contributed to its more than 35 percent profit growth in the quarter ended June 30.

Patni Computer Systems Ltd., another large software and outsourcing company, is helping U.S. clients follow the new rules by building and testing new computer systems that track transactions and approvals, said Bill Benton, the firm's "principal solutions architect." He would not disclose Patni's revenue from Sarbanes-Oxley-related business.

ExlService Holdings Inc., an outsourcing specialist with headquarters in New York but with operations centers in India, said it has 18 large clients that have come to it with compliance problems. ExlService estimated that more than 5 percent of its revenue is Sarbanes-Oxley-related. That percentage is likely to grow, said Rohit Kapoor, the company's president. "Doing this kind of risk-advisory service is becoming an integral part of our growth," Kapoor said.

Some Indian software and outsourcing companies say Sarbanes-Oxley compliance hurt their business last year as U.S. companies took longer to decide which parts of their operations they could run abroad while complying with the new law. "Still, some are embracing outsourcing as a means for their [U.S.] company to comply," said Robert H. Brown, principal analyst with research company Gartner Inc. in San Francisco.

Analysts and companies say it is difficult to project the overall size of business generated by Sarbanes-Oxley for Indian companies because the compliance projects are often part of broader system upgrades. More work could be up for grabs over the next few years, as smaller and, finally, foreign companies will be required to comply with the law, first in annual reports and then in quarterly reports.