How would an Auditor ("m") of BIP32 audit the keys generated by the master? Suppose an auditor needs to review all the incoming Tx for a given wallet... or many wallets.  What are the logical steps the Auditor needs to do?

Do they need to pre-generate a list of all possible public keys and watch new blocks for those transactions?

Assuming that there is no limit to BIP32 keys, that means the auditor would need an infinite amount of resources to audit a key (pre generation, and then cross referencing each incoming Tx).  What are some appropriate ways to constrain this auditing?
Do they need to pre-generate a list of all possible public keys and watch new blocks for those transactions?


Essentially. 


  Assuming that there is no limit to BIP32 keys, that means the auditor would need an infinite amount of resources to audit a key (pre generation, and then cross referencing each incoming Tx). What are some appropriate ways to constrain this auditing?


Deterministic keys are used sequentially. Currently a client will scan up until they hit a sequence of unused addresses in a row and assume none past this gap have been used.