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Vegetation clearing has been implicated as a major contributor to biodiversity loss. It therefore stands to reason that developers should face a regulatory requirement to assess potential impacts and to avoid, mitigate and compensate for loss of vegetation wherever proposed infrastructure developments impact on vegetation considered to be habitat for threatened species. Environmental Impact Assessments (EIA) rely on accurate information to describe the distributions of threatened species within the footprint of proposed infrastructure developments, which is critical to ensuring appropriate mitigation of potentially deleterious impacts on these populations. EIA survey guidelines seek to determine species' presence accurately, while acknowledging the limits imposed by time and budget constraints. As such, the EIA guidelines may recommend: (1) stratifying the landscape based on previous knowledge of habitat variables relevant to a species; and (2) targeting survey effort to strata with high probability of occupancy. Here, we use koala Phascolarctos cinereus surveys as a case study to explore the extent to which application of EIA guidelines result in accurate occupancy estimates. We compared the presence/absence distribution across one landscape survey and three EIA surveys, and found that koala occupancy was not well predicted by koala habitat criteria widely used to inform sampling design. In the context of EIA, we provide an example of how targeting survey effort to strata with high probability of occupancy risks misrepresenting true occurrence patterns. A general issue with survey designs that rely on previous knowledge is that they self‐reinforce erroneous assumptions. Our findings stand as a warning that EIA might neither quantify the impact of proposed infrastructure developments adequately, nor inform the ensuing mitigation measures. Threatened species' protection in the face of infrastructure development will require new approaches to EIAs to ensure that providers are enabled to undertake comprehensive environmental surveys capable of detecting priority species. [ABSTRACT FROM AUTHOR]