You don't mention which operating system you're using, so I'll assume it's some flavor of Windows. You also don't mention whether the file that your file event looks for appears on the server where BusinessObjects is running accessed through a drive letter or a UNC path, or elsewhere on the network. I'm going to assume accessed through a UNC path or elsewhere on the network.
You also don't mention whether you're running BusinessObjects or Crystal Enterprise. I'm going to assume BusinessObjects. If you're on Crystal Enterprise, some of the specifics of how to set things up may vary, but the security concepts are the same.
The security error in this case has nothing to do with how you're logged in the BusinessObjects. It's based on the network or local user ID that the BusinessObjects servers are using when they run. If you leave it at the default services ID, that ID is local to the specific server and has no network rights. You can tell how they're running by opening up the Central Configuration Manager and going to the properties of the any of the servers - since we're dealing with Events, I'd specifically look at the Event Server. At the bottom of the first tab, there's a box labelled "Log On As". If this is set to "System Account", this is probably where your problem is. It's better to set all of your servers to log in as a specific network account. We have a special "services" account set up that we use to run all of the BusinessObjects servers. This account is also given local admin rights on the machines where BusinessObjects runs. That account can then be granted the rights to view the network folders where event files will be placed.
-Dell
A computer only does what you actually told it to do - not what you thought you told it to do.