The documentation states that it gets it from either the machine.config
or the web.config
specified in your framework config folder.
For example, my Framework64/config/web.config file contains this:
<compiler language="c#;cs;csharp" extension=".cs" warningLevel="4" type="Microsoft.CSharp.CSharpCodeProvider, System, Version=4.0.0.0, Culture=neutral, PublicKeyToken=b77a5c561934e089">
<providerOption name="CompilerVersion" value="v4.0"/>
<providerOption name="WarnAsError" value="false"/>
</compiler>