I don't want to be excessively picky, but the aspect of auditor competence goes beyond that...
Those are all fair questions. As you have no doubt seen here, there are a lot of small companies that don't have qualified resources to do an internal audit and don't have the funds to hire out (who wouldn't have the knowledge of context, either, likely). So it's *a* solution. Could it be better? Probably.
They are, indeed, volunteers (no quotes needed ) and often use their vacation / PTO to enable them to do the audits. Frequently, they do the audits over several years and in these cases do get an understanding of the context. They genuinely care about finding things to effect improvement (I'm sure some more than others). The feedback we have received from external auditors has been quite positive.
Again, not saying it's the *best* solution; only *a* solution.