"We need to turn to the profession and say 'you need a healing process'. This is a crisis for us and we need to ensure we don't have a further deterioration in trust," Manuel said at a Deloitte conference.
His comments followed the release of the latest World Economic Forum global competitiveness index, which shows SA's ranking for auditing and reporting standards plummeted from 1 to 30 over the past year.
Manuel's comments were echoed by Deloitte CEO Lwazi Bam, who said: "We take no joy in seeing what's happening at KPMG. This affects all of us as a profession, and as a profession, we need to introspect."
Manuel, who is chairman of Old Mutual, which is due to list on the JSE in 2018, also took aim at the way in which independent auditors cover themselves with "30 or 40 pages" of disclaimers.
Bam suggested the profession should look at what additional work or processes it could put in place so it could provide assurance on a broader range of issues and remove the disclaimers. "We need to debate how we can rise to what society expects of us," he said.
Manuel said that the focus should be less on the independent auditors and must start with the financial management inside any company and the internal auditors who report through the audit committee to the board of directors.
"Those are your first safeguards," said Manuel, who has been vocal in his criticism of corporate governance at state-owned enterprises.
He said on Tuesday that he could not believe what the boards of some state-owned enterprises signed off in their annual financial statements.
No one was crediting KPMG with the fact that the firm had decided to shed its top nine people - a big decision for any partnership, which ought to lay the basis for a new beginning, Manuel said. That was especially so given that the firm had taken someone from outside the audit and risk profession as its new CEO. "We have got to cut them some slack and support the process, which must be about new beginnings," Manuel said.
"There is a big diversionary strategy going on when the truth of the matter is that there is strong evidence of corrupt activities by people in high places who are being left untouched," Manuel said.
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