Which of the following poses an internal control problem?

A) Physical inspection of inventory quantity and condition is outsourced to a firm that specializes in this service.
B) Products are released from inventory after a warehouse employee and a shipping clerk both sign the pick list.
C) Sales representatives have authority to increase customers' credit limits in $1,000 increments.
D) When customer payments are received in the mail, checks are sent to the cashier's office and remittance advices are sent to the accounts receivable department.

Answer: C