The Australian Funeral Directors Association says there may have to be a regulatory body created if the practices employed by one Kimberley operator in Western Australia become widespread.
Wyndham-based funeral director Imelda Agars has been stripped of both her State Government contracts after further evidence emerged of her transporting bodies for thousands of kilometres in hire cars and trailers.
Ms Agars has also been declared bankrupt, owing $826,000 to dozens of creditors across WA.
Shire of Wyndham East Kimberley CEO Gary Gaffney says the case shows there needs to be tighter regulation of the industry.
"There needs to be a better code of practice and it needs to be enforced with rogue operators," he said.
"I know it's difficult in remote areas like the Kimberley because of the distances they have to travel but cases of people being transported in the back of trailers ... it's just not what you'd expect for your loved one."
The shire wants to know why it took almost a year of complaints from bereaved families for the coroner's office to terminate the contract.
Mr Gaffney says families were traumatised by the way their loved ones' remains were treated.
"They're appalled that there was no action by Government departments that had contracts with her. They weren't being listened to," he said.
The secretary of the Australian Funeral Directors Association, Vince Calleja, says almost all operators in WA comply with the industry's voluntary code of conduct without a problem.
"Fortunately it's not been something that's happening on a regular basis. However, if more of this behaviour starts popping up then yes, I believe there may have to be some kind of regulatory body," he said.
The coroner's office says it decided to review Ms Agars' conduct in February but would not comment on why it took seven months to act.