Abstract This study examines the effect of the restating of the financial statements on stock prices in the Egyptian Stock Exchange. By answering the following question: What is the reaction of the stock market to restating of the financial statements? In order to test the hypothesis? The researcher used the design of the study (Pretest-Posttest of the event "restating the financial statements" with the control group). The study was conducted on two groups of companies: First: the treatment group, companies that restated their financial statements or issued financial restatements; and the second: the control group, the group of companies that did not restating their financial statements. The five measures of stock market reaction (stock price window 3 days, average stock price window 7 days, average stock price window 11 days, average stock price window 15 days, average stock price window 21 days) have been used. The researcher tested the hypothesis of the research using the (T-Test) statistical, the research provides empirical evidence that the restating of the financial statements does not affect the prices of shares of the Egyptian shareholding companies, meaning that when issuing afinancial restatements are not affected by stock prices. Keywords: Restating of Financial Statements, Stock Prices, Stock Market Reaction.