Instead of relying on machine-scored tests, many teachers wisely assess children's reading themselves, in an individualized session with each child. Some version of what is popularly known as the informal reading inventory (IRI) is often used for such assessment. The IRI provides a handy but not necessarily reliable method for determining what level of reading material might be appropriate for a given child. Furthermore, it is even less likely to be valid in determining a child's reading strengths and weaknesses. Some recent versions of the informal reading inventory encourage teachers to underestimate children's reading strengths and even to prescribe "remedial" work for excellent readers. Also, the various phonics, sight word, and word analysis tests that sometimes accompany the IRI have limited relevance in determining how well a child can read.
Smith, L., & Weaver, C. (1978). A Psycholinguistic Look at the Informal Reading Inventory Part I: Looking at the Quality of Readers' Miscues: A Rationale and an Easy Method. Reading Horizons, 19 (1). Retrieved from http://scholarworks.wmich.edu/reading_horizons/vol19/iss1/2