Unlike their peers with typical hearing, reading and speech challenges observed among children with hearing loss may not only be caused by developmental issues but also hearing-related problems. Although conventional oral reading assessments are useful for identifying children at risk of reading difficulties, they do not help examiners identify hearing-related issues. This study sought to develop a reliable and valid multidimensional oral reading assessment for Mandarin-speaking children with hearing loss. Reading materials with three difficulty levels were created. To examine the inter-rater reliability and criterion-related validity of the assessment, the oral reading performances of 19 children with hearing loss were evaluated using both subjective and objective measures. The findings revealed high reliability and validity for character recognition. Regarding the appropriateness of an observational evaluation, the results confirm its differentiating ability between three-point values and demonstrate a significant correlation to its corresponding objective rating scores, supporting that the subjective rating can replace quantitative analysis when necessary. This assessment has favourable reliability and validity and can be used to assist professionals in recognising red flags related to language, speech, reading and hearing problems, ensuring that adequate intervention and support can be delivered to students as required.