Flash allows you to undo even the smallest of steps. Therefore, some new Flash users think that undo is not working properly. You might have to undo several steps to go back far enough.
You also might want to increase the number of steps that can be undone. It is set to 100 by default, but it may be increased to 300. To increase the number of steps, Select Edit > Preferences > General Category and change the number of Document-level undo levels.