A method for performing a fibre channel arbitrated loop integrity test using a fibre channel switch element is provided. The method includes, sending a fibre channel frame through the arbitrated loop; receiving the fibre channel frame after it has traversed through the arbitrated loop; performing a data compare between the fibre channel frame that was sent and the fibre channel frame that is received; detecting internal errors, if any, in the traversed fibre channel loop; and isolating a module that may have generated the error. The switch element includes, a cascade port that is used to couple one fibre channel switch element to another in a loop; and a port that sends a fibre channel frame through the loop and detects internal errors based on the comparison and a isolates a module that may have generated the internal error.