Tgger -
Several things occur. Like others have suggested you need to let the school know you didn't think the book was particularly challenging.
However - as I have learned over the years - the school is also looking for accurate reading of all words. Appropriate stopping/ pausing at punctuation. Expression. Understanding structure of the book - author/ illustrator/ table of contents/ index/ etc... Prediction - guessing what might happen next in the story. Our school is also big on altering endings.
The other thing that occurs however is that if your DS is well ahead of others, these initial books as the teachers form sets of pupils at various reading levels may not suit - but they should differentiate for all abilities.
With the reading diary you can write that your DS read beautifully and found this book very easy to read.
If you don't want to raise this issue with the teacher just yet - make a note of what he has been reading and how easy this was for him (1 being super easy - word perfect, good pace & expression to 5 being very difficult - really struggled, often needed help sounding out words). Also bear in mind that how your child reads with you, may not be the way he reads at school. My DD1 gets very nervous reading out loud in front of her friends - because they often laugh when someone pronounces a word wrong or differently.
At some point you should discuss with the teacher several possibilities:
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if your DS has to read these books because of group/ class exercises, could he borrow books from class or school library which are more challenging?
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if the home reading isn't picked up again in class - could he be assigned more challenging material
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if it isn't possible to do either option above all of the time - could a combination of the two be put in place.
With my DD2 guided reading books often are easy, but she needs work on reading every word (she sometimes skips easier words when distracted by a more difficult word further along in the sentence). I try to read her guided reading book with her at least 2x a week - and if she's doing well, as a reward, we read her school library book. Personally - I think my DD2 prefers the school library books only because she's chosen them - rather than been assigned them.
Finally remember there's nothing stopping you reading something else at home. We often write in our reading diary that we've been reading something completely outside group/ class library/ school library reading. The teacher's usually write that's fantastic - and if it isn't in the library they ask my DD a bit about the book and if she'd recommend it to other children and put it on the library wish list.