If the hardware's all working, then yes - this should work just fine. You may or may not be able to hear anything during the transfer, depending on your system's ability to monitor real-time while you transfer. But you should be able to transfer a 1 minute sample, stop the transfer / recording, and then play it back to confirm it's working.
My guess: you need to configure SF / Audition to use the appropriate device (IP35 Pro optical input) as the recording source. In older versions of Audition, one selected the recording source in Options | Device Properties or Device Order. Not sure if it's the same in Audition v3 and I doni't how to do it in SF.