"We also found traces from trade restricted animals that are classified as vulnerable, endangered, or critically endangered, including the Asiatic black bear and Saiga antelope."
The research, published in the journal PLoS Genetics, comes as New Zealand's Parliament Health Select Committee considers the Natural Health Products Bill, which aims to tighten regulations around the manufacture, sale and labeling of natural health products in New Zealand.
Researchers said it has previously been difficult to determine the biological origins of the ingredients within TCMs because processing into pills and powders makes identification difficult.
PhD student Megan Coghlan, who is studying the application of DNA techniques in wildlife forensic applications, said the research showed the testing method - second-generation, high throughput sequencing - is a cost-effective way of auditing the species composition of products.
Further testing of tradition Chinese medicines would make it easier for customs officials to identify the trade of endangered species.
"We found multiple samples that contained DNA from animals listed as trade-restricted according to the Convention on International Trade in Endangered Species Legislation. Put simply, these TCMs are not legal," Ms Coghlan said.
The mislabeling of the medicines also meant consumers were unaware of the presence of ingredients such as animal DNA and potential allergens such as soy or nuts, Dr Bunce said.
"A product labelled as 100 per cent Saiga antelope contained considerable quantities of goat and sheep DNA," Dr Bunce said. "Another product, Mongnan Tianbao pills, contained deer and cow DNA, the latter of which may violate some religious or cultural strictures."
"It is hoped that this new approach to genetically audit medicinal products will bring about a new level of regulation to the area of complementary and alternative medicine.
"Auditing TCMs would assist in prosecuting individuals who seek to profit from the illegal trade in animal products."
Victoria University of Wellington Professor Shaun Holt, said that while some of the herbs of traditional Chinese medicine may be found to be safe and effective, the Australian research highlights issues around their use.
"Firstly, there is a lack of data from good clinical trials on safety and efficacy.
"Secondly, there are legitimate concerns about product quality in terms of contamination with products that are not supposed to be included.
"And thirdly, there are concerns that some of the products are from endangered animal species and some products may have been obtained illegally and contributed to the problem. This important paper confirms that the second and third issues are of real concern," Dr Holt said.
"TCM products are used all around the world, including New Zealand, and my advice to consumers is that they should be very careful. I have no doubt that future research will demonstrate the efficacy and safety of some products, and that quality control will improve to acceptable levels, but currently, I personally would not use or recommend any TCM biological product for the reasons outlined above."