It seems I have a misconception on how FME should access external resources like databases and CSV files. We have a default setup meaning the FME services run as Local System. It doesn't appear there is a way to assign permissions at the workspace level. For instance, Workspace1 is run by domain account X, Workspace2 run by domain account Y, etc. Changing the services to run as a domain account wouldn't provide separate Workspace security to file shares and databases.
How should we provide access to external resources like a CSV on a network share or a database? Is the standard to copy files to the FME server and use SQL Authentication? Any thoughts would be appreciated.