Profile is active and uses an unsuitable reference profile

What causes this issue?

The profile is marked as active and points to a reference profile.
However, this reference profile does not exist (message is displayed as
an error) or is not active (message is displayed as a warning).
Non-existence can also mean that the default reference profile is to be
used, but no profile has been selected as the default profile.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.