Or you can just have one-on-one oral examinations. Nah, that's a lot of work.
Testing is unpleasant and it doesn't work anyhow, IMO.
Edit: However, there are edge cases where testing could provide more accurate results - for example, a socially-inept person, may be too nervous to talk in person, but could pass the test with a good results.
Depth of knowledge, for example, depends on the connections one forms with other areas of knowledge.