Well I'm here to tell you that's false. I do auditions all the time, and people typically have an inflated view of their own skills. I do as well. . . you probably do too. The way to combat this is to simply record yourself and listen to it. Prepare to be humbled (and don't perform publicly shortly after you do. My confidence had to recover from my first album for about 5 months)
Unfortunately even that doesn't work for some people. And, unfortunately, some of those people audition for the music/worship teams at churches. I found this video on a great blog, worthilymagnify.com (if you're a worship team person. . . bookmark it).
This guy says he has a "5 octave range". That would be pretty impressive. . . a few people can do that. (very few) I actually had a guy tell me during an audition that he had a "7 octave range". Besides being almost impossible, a skill like that would certainly not be helpful to any worship team, since you know. . . that person would probably be an alien. (I heard Mariah Carey has a 7 octave range. . . ok, I'd have to hear it . . . fyi, the piano has 8 octaves)
This video is classic, enjoy: