Does Apple TV and Optical Audio Connection work?

I've read several posts regarding this issue and I'm a little confused.  Does the Optical Audio work on the Apple TV (generation 3), because I haven't been able get it to work.  I get sound but no stereo/surround sound.  Yet, using the same connection out of my Receiver for my PS3 I do get stero/surround sound.  Have I missed a setting on the Apple TV?

Is there away I can check the Apple TV Optical Audio connection to see if it's working?  The physical connection seems to be fine.  Since the connection to A/V Reciever works, as confirmed by my PS3, I can only assume the Apple TV Optical Audio connection is faulty.  Other ideas on how I might validate if the Apple TV Optical Audio connection is truly "broken."

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