An audio converter is hardware or software capable of decoding or encoding a digital data stream of audio. Analog-to-digital converters receive a continuous signal, usually voltage, and convert it into a digital number to estimate its amplitude.
Digital-to-analog converters turn digital data back into a physical quality to be relayed via wire into an amplifier. If a device contains both of these types of converters running off of the same clock, it is known as an audio codec. Sound cards with both an input and output, such as those located in computers, are audio codecs. Software audio codecs are compression and decompression algorithms used to assist in file storage and playback.