When logging in to Web Reports, the "Reports Tree" to the left is not shown, and an error message is shown stating that login has failed for the user "NT AUTHORITY\IUSR".
A longer more elaborate explanation for this issue can be found here.
In short this is a result of not following the Web Reports installation guide. The SQL Server must be installed with an instance name, and the SQL Server must be started by the user "SYSTEM".
There are two solutions to this issue:
Solution 1: Reinstall the SQL Server and Web Reports following the installation guide