A sample Android digital compass application that fuses accelerometer and magnetometer sensor data to obtain a tilt compensated heading. Moreover, a low-pass filter is used to obtain smoother sensor data, and magnetic declination is calculated to obtain true heading.
The following blog post discusses the sample application in detail: Developing a Compass Android Application
Attribution: The open source Java implementation of the World Magnetic Model (WMM) created by Los Alamos National Laboratory was used to calculate magnetic declination. NOAA