no sound or recording in windows 8.1 on parallels 9 OS 10.9.2

R

RZ2012

Bit poster
I really hope someone can help me here.
I have a MacBook air 13" (purchased new in 2014), running Mavericks Mac OS 10.9.2, parallels desktop 9, build 9.0 24229 and windows 8.1, all installed in march 2014.
built in microphone and speakers on macbook air (no mic-in option)
sound and recording audio work fine on mac OS

No sound out or mic recording in on the Windows 8.1 side when all audio drivers set to parallels audio drivers
When set to 'built-in' or 'default' for speakers and/or mic in Windows I get an echo even from ambient sound which gets louder without me doing anything and I have to switch to parallels audio drivers to stop the echo.
I am unable to record, or hear audio or Skype on the Windows 8.1.
Everything is ticked green, device drivers say they are installed, up to date and working fine.
When try to do the 'set up mic' option, nothing happens when I do the test recording, whichever type of mic I try to set up (headset/desktop/other)

Apple Store Genius bar said they cant help as problem isn't with the Apple side but with 3rd party software
Parallels say I am past the 30 day support and will have to pay for any further tech support
Microsoft say that because it is an Apple device it isn't their problem.

I am stuck, having bought the machine specifically to record into a Windows based programme and have followed all troubleshooting option on all three websites.
Can anyone help please?
MacBook Air, OS X Mavericks (10.9.2), parallels destop 9, Windows 8.1
 
I reinstalled Parallels Tools. I followed kb 112477, checked sound on my Mac (it is set as output - internal speakers - built in; input - internal microphone - built in)
Went into Parallels desktop/preferences/hardware/sound
'connected' is ticked
When setting to input-built in mic and output-built in output I get an increasing crescendo echo from ambient sound, and I have to press mute to stop the sound
Same increasing crescendo echo happens when I set input and output to default input and default output respectively.
Audio configuration checked in Windows virtual machine - shows parallels audio controller. another section in device manager shows that audio inputs and outputs are set to Parallels audio controller for microphone and speaker.

The MBA has built in mic, no separate mic input, but it seems to be interfering with a loop of sound.
 
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