Traditional auditing is increasingly inadequate against the rising complexity of modern corporate fraud. This paper examines the transformative role of Artificial Intelligence (AI) in forensic accounting, focusing on its ability to detect, investigate, and prevent financial deception within the Indian corporate landscape. By leveraging machine learning, anomaly detection, and predictive analytics, AI enables forensic accountants to process massive datasets and identify hidden patterns that manual analysis often misses. Drawing on secondary data and notable Indian case studies, the study demonstrates how AI shifts fraud management from post-event investigation to real-time early warning systems. While AI reduces human bias and enhances investigative precision, it serves as a decision-support tool rather than a replacement for professional judgment. The findings suggest that while AI significantly bolsters corporate governance, its success depends on regulatory support and ethical data practices. The paper concludes that a transition from reactive to proactive AI integration is essential for strengthening future fraud risk management frameworks.