The Audio Codec is a circuit that controls sound signals in a cellphone circuits. It acts like an audio amplifier or an audio mixer or a sound booster.
Audio codec is the main area in a mobile phone where all audio properties is being process, during transmission and receiption. It converts the sound signal into radio frequency signal, and also converts radio frequency signal into a sound signals.
Like for example a microphone's sound signal is being amplified then converts and feeds to radio frequency before it send to the network airwaves. Opposite to that process is the conversion of radio frequency into an audible or understandable sound, and that sound is that what we hear on the earpiece speaker.
A typical block diagram below show how audio interfaces being connected to an audio codec circuit.