Which digital audio format complies with MPEG-2 while offering smaller file sizes and better audio quality?

Advanced Audio Coding (AAC) is the digital audio format that complies with MPEG-2 and is designed to provide smaller file sizes while achieving better audio quality compared to earlier formats like MP3. AAC efficiently compresses audio data, using a more advanced encoding process that allows for higher fidelity at lower bit rates. This is particularly beneficial for streaming and downloading audio content, enabling users to enjoy high-quality sound without taking up excessive storage space.

In contrast, formats like MP3, while widely used, do not offer the same level of audio quality at comparable file sizes as AAC. Audio Video Interleave (AVI) is primarily a video format that can contain audio but does not optimize for audio compression specifically. The WAV format, while high-quality, is uncompressed and, therefore, results in significantly larger file sizes, making it less suitable for situations where storage capacity and bandwidth are concerns. AAC's design emphasizes both efficiency and quality, making it the preferred choice in many modern digital audio applications.