Disk Dog;
Not sure why you would not simply use the ellipse tool (constrain with
shift key for circles), but that said, I believe the smooth setting is for
curves, and there are also preferences which affect the tolerance of the
smooth and straighten modifiers. -Tom Unger

Does anyone know why I can't draw a perfect circle? I use the pencil tool, then
choose the "straighten option" and when I draw a circle in the stage, it does
not auto to make a perfect circle. I get what I drew....