Audio codecs compress and decompress digital audio data according to audio file formats. Codecs aim to represent high fidelity audio with minimal bits while retaining quality, reducing storage space. Common codecs include Windows Media and Winamp. Lossy codecs like MP3 are used widely and prioritize size over quality. Lossless codecs like FLAC maintain exact copies but have lower compression. Common audio formats include WAV (uncompressed), FLAC (lossless), and MP3 (lossy).