I'm working with an ArcGIS Server that was configured as a local account (as opposed to a domain user). I am attempting to register a non-local (on the shared drive) data source with the server and grant the ArcGIS Server account user permissions to read the data. I realize there is a work around that involves creating an identical local user account (same name and password)on the machine with the data source or to run the utility that allows me to change the ArcGIS server account. My question is simply, does the Arcgis Server local account not exist outside of the local environment?
The arcgis server local account does not get created outside of the local machine environment. So if you create the account on srvr a it will not exist on srvr b. You are correct in your workarounds, create same user and password on srvr b or run the utility and change the user to an AD account that is accessible by both machines.