A compilation is a financial statement where the information is the "representation of management." A CPA need not be independent of the business to prepare a compilation. Since the CPA is not required to perform inquiries of management or conduct analytical procedures, a compilation provides the lowest level of assurance. As a result, it is usually the most cost-effective.
A review is very similar to a compilation; however, the CPA is required to expand procedures to provide 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 Generally Accepted Accounting Principles (GAAP). A CPA must be independent of the business, must perform analytical procedures, and perform inquiries of management.