This paper presents Advanced Audio Zip (AAZ), a fine grained scalable to lossless (SLS) audio coder that has recently been adopted as the reference model for MPEG-4 audio SLS work. AAZ integrates the functionalities of high-compression perceptual audio coding, fine granular scalable audio coding, and lossless audio coding in a single framework, and simultaneously provides backward compatibility to MPEG-4 Advanced Audio Coding (AAC). AAZ provides the fine granular bit-rate scalability from lossy to lossless coding, and such a scalability is achieved in a perceptually meaningful way, i.e., better perceptual quality at higher bit-rates. Despite its abundant functionalities, AAZ only introduces negligible overhead in terms of lossless compression performance compared with a nonscalable, lossless only audio coder. As a result, AAZ provides a universal yet efficient solution for digital audio applications such as audio archiving, network audio streaming, portable audio playing, and music downloading which were previously catered for by several different audio coding technologies, and eliminates the need for any transcoding system to facilitate sharing of digital audio contents across these application domains