You may not be able to access Reporting Services after you create an application pool that runs under the LocalSystem account (907267)

SYMPTOMS

After you create an application pool that runs under the LocalSystem account for the Report Server Web service, you may not be able to access Microsoft SQL Server 2005 Reporting Services. Additionally, the following error message may be written to a ReportServerService_timestamp.log log file:

ReportingServicesService!library!14!8/19/2005-08:09:25:: i INFO: Initializing DisplayErrorLink to 'True' as specified in Configuration file.
ReportingServicesService!library!14!8/19/2005-08:09:25:: i INFO: Initializing WebServiceUseFileShareStorage to 'False' as specified in Configuration file.
ReportingServicesService!library!14!8/19/2005-08:09:27:: e ERROR: Throwing Microsoft.ReportingServices.Diagnostics.Utilities.UnknownUserNameException: The
user or group name 'LocalSystem' is not recognized., ;
Info: Microsoft.ReportingServices.Diagnostics.Utilities.UnknownUserNameException: The user or group name 'LocalSystem' is not recognized.
ReportingServicesService!servicecontroller!14!8/19/2005-08:09:27:: e ERROR: Exception caught starting RPC server: Microsoft.ReportingServices.Diagnostics.Utilities.UnknownUserNameException: The user or group name 'LocalSystem' is not recognized.
at Microsoft.ReportingServices.Library.Native.NameToSid(String name)
at Microsoft.ReportingServices.Library.ServiceAppDomainController.StartRPCServer(Boolean firstTime)
ReportingServicesService!configmanager!14!8/19/2005-08:09:27:: Error occured with a config file change. New config file will not be used. Error: The user or group
name 'LocalSystem' is not recognized.
ReportingServicesService!configmanager!5!8/19/2005-08:09:27:: i INFO: Handling File Changes

Note In this error message, the word "occured" is a misspelling for the word "occurred."

CAUSE

This problem occurs because the Windows Management Instrumentation (WMI) provider writes an incorrect string in the RSReportServer.Config file. When the application pool identity is set to LocalSystem, the WMI provider writes the following in the RSReportServer.Config file:

<WebServiceIdentity>Local System</WebServiceIdentity>

The WMI provider should write the following in the RSReportServer.Config file:

<WebServiceIdentity>NT Authority\System</WebServiceIdentity>

Therefore, the Windows NT service cannot validate an account that is named Local System.