The “Audio Output” setting can only be changed if you are using a HDMI cable to your TV. These settings are only used when the HDMI is connected. More information about those settings can be found in the user manual on page 19.
If you are using a standard yellow video cable then the “Audio Output” options will be grayed and not available to change. This is normal and if “Speakers” is showing grayed out then the correct setting is on and the sound will come from the speakers connected to the Home Theater system.
Note: If the “Audio Output” is not available to change but is set to “Speakers” this is normal. The “Audio Output” can only be changed if you are using a HDMI cable. If you cannot select “Speakers”, please power off the device and connect a HDMI cable. Power back on the system and now change the “Audio Output” to “Speakers”