When an accountant compiles financial statements of an organization based on the data provided without any assurances or audits, that is referred to as compilation.

Whenever the financial statements of a company are compiled, the compilation report must be included and it must state regarding the financial statements that they are truly reflective of the organization. The accountant provides no assurances as they have not been audited nor reviewed.

The main essence of compilations is to enable companies to have complete financial statements at a lower cost than ones that have been audited.