Both are possible, and actually done. It's easy to tell apart. If there's just a codec chip (Realtek ALC series, VIA 16xx series, C-Media 9xxx series etc.), then sound is generated by the chipset's own sound engine and passed to the codec via a dedicated AC97 bus link, not on the PCI bus. If there's a standalone PCI sound chip (C-Media 8xxx, VIA Envy24, or whatever), then it's obviously on the PCI bus.