1. A method of processing an audio signal, comprising: subdividing a channel in a frame of the audio signal into a plurality of blocks according to a subdivision hierarchy, the subdivision hierarchy having more than one level, each level being associated with a different block length, and at least two of the blocks in the channel for each level being capable of different lengths; generating first subdivision information indicating a number of levels in the subdivision hierarchy; generating second subdivision information indicating the subdivision of the channel into the blocks; determining an optimum prediction order for each, block based on a maximum permitted prediction order and a length of the block, a prediction order indicating a number of prediction coefficients; predicting current data samples in the channel based on previous data samples, a number of the previous data samples used in the predicting step being the optimum prediction order; and obtaining a residual of the current data samples based on the predicted data samples, wherein the second subdivision information includes a number of information bits, the information bits indicating the subdivision of the channel into the blocks, wherein the number of the information bits is decided based upon the number of levels in the subdivision hierarchy, wherein the determining step includes, determining a global prediction order based on the maximum permitted prediction order; determining a local prediction order based on the length of the block; and selecting a minimum one of the global prediction order and the local prediction order as the optimum prediction order.