I believe on manual vehicles it is measured in third because of the ratio is 1:1 or something like that, closests ratio in the trans.
In an auto, I never payed attention on how/what they actually do. I know some places make it so the converter wont lock up.
It would probably be a good idea to call the shop that is doing the dyno beforehand to see what their common practice in dyno operation is. Are you going to get dyno tuned or are you just getting rear wheel numbers?
Don't quote me, I'm not 100% and I'm not a dyno operator either.