Test students in familiar and comfortable environment. Taking a test is a change in the daily routine, and may be somewhat distressing for young children. If the child is in preschool, the test should be given there. Many four year old kids take reading tests before entering kindergarten. In that case, the tests can be administered in a room in the school they will be attending like the library or parent center.
Talk to the child before the test. This will help alleviate some of the child's fears. The student will usually be comfortable if the classroom teacher is administering the test. If the test is being given by an unfamiliar person, the child will probably be at ease after a few minutes of informal chatting as a way to break the ice.
Explain test instructions, and give several opportunities for practice. Before administering the test, explain the purpose of the test, using child friendly language. For example, before a letter naming assessment, tell the child that you want to find out how many letters they already know before they begin school. Next, show the child how the test is conducted by modeling the procedure. If they still appear unsure, explain the procedure again.
Make sure testing sessions are brief. Most reading tests for four year old kids are short, skill based assessments that test letter and sound recognition. If possible, do not give multiple assessments in rapid succession. The child may become confused, and results will not be completely valid.