"..Many tests are a joke and no ATO should be permitted to test his own students, especially above PPL..."
I have either had training at or contact with five schools over the years for CPL, IR, renewals etc and can honestly say that schools that conducted their own testing had higher standards than the ones using external ATOs. This is my own experience only but I think the difference was very noticable.
External ATOs can become 'attached' to one organisation if it provides enough work and if there was a run of failures it would be more likely that a new ATO would be found rather than it provoking soul searching from the CFI.
I know of one school CFI/ATO who would not be asked to test students from surrounding training organisations even though they were desperate purely because his standards were high and failure would be a forgone conclusion. Again this is my experience only however I would be very interested in what others have to say on the subject.
The Comet.