Here in the Old Dominion, we have to show proof of progress each year. Testing seems the easiest method and since this is our first year homeschooling, that's my choice. Word around town is the CAT from Seton.
There are others out there that are more strenuous and cover more subjects. I personally don't think it is necessary to put my children through this process. I am their teacher and I know what they do and do not know. Take it from a skimmer, tests do not show your child's true potential. I was famous for missing answers I knew and for guessing the ones I didn't! I did decide to give Pete a little assessment test I found online just to prepare him for test taking. Since Pete doesn't like to read, I read the test questions and the answers choices. He did very well and we discussed test taking strategies - such as elimination for answers he wasn't sure of. He caught onto this very quickly.
So great, he now knows how to be a good guesser.
In fact he made up a guessing method I hadn't heard of for a few of the easier math problems and I decided I had to curb that process. Here's an example: The picture showed 11 pencils lined up by twos. He looked at the picture for about a second, looked at the four answer choices and immediately picked 11. At first I thought wow! All that time counting by 2s on the abacus is paying off. Then I asked him how he counted the pencils so fast. His reply, "I saw a lot of pencils and 11 was the biggest number." I asked him to count by 2s and he got the same answer and he said, "see, I was right." You just can't reason with that! Especially when he did the exact same process for a similar problem and chose the correct answer.
We'll have to keep working on those all important test taking skills.