Teacher says my 5 year old reads fluently. I think he has memorised the books

UKG report says 'reads fluently'. At home he 'reads' his three school readers perfectly. Give him a new page at the same level and he guesses from the picture. He has memorised them. I'm not upset with the school. I want to know which is true before class 1. How did you find out whether your child was reading or reciting, and did it matter at this age?