Can't understand callback function

UserSchema.statics.authentication = function(email, password, callback){
  User.findOne({ email: email})
    .exec(function(error, user){
      if(error){
        return callback(error);
      }
      else if(!user){
        var err = new Error('User not Found');
        err.status = 401;
        return callback(err);
      }
      bcrypt.compare(password, user.password, function(error, result){
        if(result === true){
          return callback(null, user);
        }
        else{
          return callback();
        }
      });
    });
}

User.authentication(req.body.email, req.body.password, function(err, user){
      if(err || !user){
        //
      }
}