A system for determining the position and orientation of a tracked object by measuring electromagnetic energy. The system includes a shield of magnetic permeable material positioned on one side of the object to be tracked. A transmitter emits the electromagnetic energy and there is a tracker sensor. One of the transmitter or tracker sensor is attached to the object to be tracked. A correction sensor is at fixed location relative to the transmitter assembly. Both sensors assemblies measure the electromagnetic energy emitted by the transmitter. Based on the energy measured by the correction sensor, the location of a virtual dipole that mirrors the transmitter, the real dipole, on the opposite side of the shield is determined. Based on the positions of the real and virtual dipoles and the energy measured by the tracker sensor, the position and orientation of the tracker sensor relative to the transmitter is determined.