According to the ancient Indian philosophical text i.e. BHAGAWAD GITA it is said that the AUM is the representation of the "Brahma" which is the origin and the energy source of the whole universe. In other words AUM represents God.

Another text called "Mandukya Upanishad" says that AUM is the Atma or Soul who is the owner and controller of each human being and residing in the heart .
Further Mandukya Upanishad explains that the three components of OM viz. AUM are representing three states i.e. wakeful, (conscious), dream (subconscious) and dreamless sleep (unconscious).
The fourth component as explained stands for "Turiya", a state which is beyond the above three states.

Many Upanishads had explained the detail procedure of meditating AUM, the immediate stages, the experiences and the ultimate spiritual benefits.

It is explained in Kathopanishad as follows.
The upanishad claims that goal which all the Vedas equivocally proclaim, which all the austerities speak and write, for which people practice brahmacharya it is this "AUM". AUM is a root of all mantras.
"Mantras" is a typical combination of words which affects the surrounding and human being through the vibrations. These mantras are to be chanted for enormous number of times to get the results. The results are miraculous. AUM is a mantra with only one syllable but is the basic mantra. Each and every mantra starts with AUM and mostly ends with AUM.