A compilation assists management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements in order for them to comply with the applicable financial reporting framework.

A review provides limited assurance that there are no material modifications that should be made to the financial statements in order for them to be in conformity with the applicable financial reporting framework.

An audit gives the highest level of assurance that your financial statements are free from material misstatement. 

Here is a diagram that illustrates the relationship between a compilation, a review, and an audit, all of which are attest engagements.

 Audit Review Compilation Diagram.JPG

A compilation differs significantly from a review or audit engagement. A compilation does not contemplate the performance of inquiry, analytical procedures, or other procedures performed in a review. A compilation provides no assurance.

A review differs significantly from an audit of financial statements in which the auditor obtains a high level of assurance (expressed as reasonable assurance) that the financial statements are free of material misstatements. A review does not contemplate obtaining an understanding of the entity's internal controls, assessing fraud risk, testing accounting records by obtaining sufficient appropriate evidence through inspection, observation, confirmation, or the examination of source documents, or other procedures performed in an audit. Accordingly, an accountant in a review engagement does not obtain assurance that he or she will become aware of all significant matters that would be disclosed in an audit. Therefore, a review is designed to obtain only limited assurance that there are no material modifications that should be made to the financial statements in order for the statements to be in conformity with the applicable financial reporting framework.