Compiled financial statements are the resulting output of a compilation engagement: financial statements an accountant has organized into proper income statement and balance sheet format from a client's own figures, without performing any audit testing or review procedures on the underlying amounts.
What makes these statements different from audited ones
Compiled financial statements carry an accountant's report making clear that no assurance is being provided on the accuracy of the figures, in sharp contrast to audited financial statements, which carry an opinion the auditor has actually tested and is prepared to stand behind. A reader of compiled financial statements is relying essentially on management's own representations, with the accountant's role limited to proper formatting and presentation.
Where to go for the full explanation
See Compilation for a complete explanation of what a compilation engagement actually involves, how it compares with a review and a full audit, and why some businesses choose this lower, less expensive level of accountant involvement rather than paying for greater assurance.