Final answer:
The statement is false; total stations do not need to be set to magnetic north, as they are typically referenced to true north or a local grid for precision surveying.
Step-by-step explanation:
The statement that it is imperative to set the instrument exactly to the magnetic north prior to taking any readings with a total station system is false. Total stations measure angles very precisely, but for most surveying applications, measurements are typically referenced to true north rather than magnetic north. This is because the Earth's magnetic north does not coincide exactly with the geographic north pole (true north). Moreover, the position of magnetic north changes over time due to changes in the Earth's magnetic field, a phenomenon known as magnetic declination. Surveyors often use a local grid for reference or correct for magnetic declination if referencing magnetic north.