What to do: Only integrated security is supported for AX queries

In Dynamics Ax 2012, Microsoft SQL Server Reporting Services (SSRS) is the primary reporting platform. So all the default preconfigured reports that are shipped with Microsoft Dynamics Ax run on the Reporting services platform.

And therefore, the below installations should be done perfectly:

1. SQL Server Reporting Services (SSRS - Part of SQL Installation)
2. Reporting Server extensions (Business Intelligence components of Microsoft Dynamics Ax)

If your installation went wrong somewhere, then there is a chance that you might get the error: Only integrated security is supported for AX queries when trying to open an report in Ax 2012.

Or you might see that the report will be opened, but you will be asked to enter the username and password to proceed further. Below is the related screenshot:

Solution if error occurs for a single report:

1. Identify the Report name
2. Open Reporting Services Configuration Manager ( All Programs > Microsoft SQL Server 2008/2012 > Configuration Tools > Reporting Services Configuration Manager)
3. Go to "Report Manager URL" Tab and click on URL
   Typically, URL will be in the format http://<ServerName>:80/Reports
4. Select the particualr Report under DynamicsAx Folder
   
5. In the opened page, select Data Sources on the left pane.
   And apply Windows integrated security and click Apply.
   
6. Now the report should be opened automatically without any error message and also shouldn't ask for any username and password.

Solution if errors pops up for all SSRS Reports:

You can still apply the above approach for all the reports and it will work. But that is not the right approach for obvious reason, will take a lot of time to do that.
More appropriate solution would be to delete all the reports and redeploy all the reports. Steps are as follows:

1. First step is to delete all the existing SSRS Reports. For doing this you can navigate to DynamicsAx folder and delete the entire folder.
   
2. Then go to Report servers form in Dynamics Ax 2012 and click on "create report folder" button to create the Folder DynamicsAx again.
   
3. Now you can open Powershell (Administrative Tools > Microsoft Dynamics Ax 2012 Management Shell). Make sure you run Powershell as Administrator.
4. Deploy all the reports with the help of command:
   Publish-AXReport -ReportName *
5. And once, all the reports are deployed you should be good to go.

Hope this helps !!