No one will ever interview at the firm again, so a Bear Stearns interview question is like fossil from the days before the subprime crisis.
A tipster gave us an example of one question he got at Bear that any firm could ask:
“Tell me the line items on an income statement.”
What Bear was asking for were the items that would be listed on an income statement, like income, sales, expenses, etc.
It’s a pretty simple question that anyone who’s taken basic accounting should know. But it’s funny coming from Bear Stearns because during the financial crisis, a huge argument arose over how firms should value their assets, and Bear and Lehman Brothers were at the centre of the discussions.
Bear Stearns was told it would have to write down significant assets because of a change in the definition of “fair-value” accounting. The rule was part of the reason that the firm was eventually sold to JPMorgan for $2/share.
Bear was also later accused of accounting fraud by Ambac, for one.
So the (somewhat unfair) joke is that no one at Bear was really in the position to be asking questions about accounting.