I have a report running on Account. One of the users have access to the folder but not the report. The users profile has read, create, edit, viewall for account.
I am quite baffled as to what is causing this.
If You are using Custom Report Type for Report Make sure it is "Deployed"
The report is most likely accessing some information that the specified profile/user does not have access to, which raises the "insufficient privileges" error.