diff --git a/tests/declare-program/idls/external.json b/tests/declare-program/idls/external.json
index c709fcfdfa..f587ac0b2d 100644
--- a/tests/declare-program/idls/external.json
+++ b/tests/declare-program/idls/external.json
@@ -44,6 +44,31 @@
       ],
       "args": []
     },
+    {
+      "name": "test_compilation_data_as_parameter_name",
+      "discriminator": [
+        225,
+        145,
+        68,
+        92,
+        146,
+        206,
+        248,
+        206
+      ],
+      "accounts": [
+        {
+          "name": "signer",
+          "signer": true
+        }
+      ],
+      "args": [
+        {
+          "name": "data",
+          "type": "bytes"
+        }
+      ]
+    },
     {
       "name": "test_compilation_defined_type_param",
       "discriminator": [
diff --git a/tests/declare-program/programs/external/src/lib.rs b/tests/declare-program/programs/external/src/lib.rs
index f7a538a049..d13bdbda61 100644
--- a/tests/declare-program/programs/external/src/lib.rs
+++ b/tests/declare-program/programs/external/src/lib.rs
@@ -1,3 +1,5 @@
+#![allow(unused_variables)]
+
 use anchor_lang::prelude::*;
 
 declare_id!("Externa111111111111111111111111111111111111");
@@ -46,6 +48,14 @@ pub mod external {
         Ok(true)
     }
 
+    // Compilation test for whether `data` can be used as an instruction parameter name
+    pub fn test_compilation_data_as_parameter_name(
+        _ctx: Context<TestCompilation>,
+        data: Vec<u8>,
+    ) -> Result<()> {
+        Ok(())
+    }
+
     // Compilation test for an instruction with no accounts
     pub fn test_compilation_no_accounts(_ctx: Context<TestCompilationNoAccounts>) -> Result<()> {
         Ok(())