When the family confronted the undertaker about the coffin swap, he allegedly told them it was "common practice".
The funeral home, Harts Family Funerals, has denied any wrongdoing but declined to comment, according to ABC.
Whitsunday Funerals and Crematorium director Jeff Doyle has previously raised concerns about the standards in the industry, telling ABC it is easy for funeral companies to swap coffins without anyone knowing.
"This is the sort of thing that's probably common practice around Australia.
"But unfortunately because most crematoriums, you're not allowed to go down and actually see the coffin go into the cremator, it's easy for them to do it.
"I feel sorry for the family in Rockhampton, I really do. I've been trying to get this out a long time."