A deployment of a SharePoint product or technology uses a variety of accounts to run services and access front-end and back-end servers. If you specify domain accounts for your deployment, be sure to follow best practice recommendations and specify accounts that are used exclusively by the SharePoint Web application. Do not configure a service account to run under the domain user account of an actual person who will be accessing the SharePoint site. If you access a SharePoint site using service credentials, you might encounter access denied errors when you open reports.
If you do not use a domain account, you might encounter a second issue provided you have the following combination of factors:
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The report server is integrated with a SharePoint farm that consists of more than one computer.
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The SharePoint site and the report server are on different computers.
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The SharePoint site is hosted in an application pool that runs as a built-in account, such as NetworkService.
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The Reporting Services proxy endpoint connection to the report server is configured to use Trusted Account mode.
In this scenario, when a user views a report or accesses Reporting Services features from the SharePoint site, the following error occurs:
"An unexpected error occurred while connecting to the report server. Verify that the report server is available and configured for SharePoint integrated mode. The permissions granted to user '<acccountname>' are insufficient for performing this operation."
To avoid this error, follow the recommendations in the Windows SharePoint Services 3.0 product documentation and run the application pool service as a domain account. For more information about service account requirements and recommendations, see Plan for administrative and service accounts in the Windows SharePoint Services 3.0 product documentation.