IAR for AVR compiler - converting unsigned short to unsigned char without warning

today I've catched quite unfamiliar situation with my code. I've changed type of variable passed as parameter to function - from unsigned char to unsigned short and...there was no warning! On the debug I saw that variable's value is truncated and rest of the functio happily play with half of value without any problem....what the heck?!

Below short code snippet:

void func1(unsigned char param)
{
    if(param == 0x02) //even if passed parameter is 0x0102, truncated data fits and enter branch
    {
        __asm("nop"); //just anything to avoid optimization
    }  
}

void func2(void)
{
    unsigned short param_test = 0x0102;
    unsigned char test2;

    test2 = param_test; //completely fine for compiler, "test2" stores 0x02 value
    (void)test2;        //to avoid compiler warning of not used variable

    func1(param_test);
}

IAR compiler doesn't see any problem to not inform programmer that something may not work as intended...

Windows C compiler is VS at least return warning C4244: "conversion from unsigned short to unsigned char, possible loss of data". Is there any flag for IAR as well? I couldn't find it yet...