Very puzzled by the suggestions that you should only ask the singer to prepare two songs.
Unless you're doing originals or very obscure covers, any decent singer should have no trouble at all prepping at least a dozen songs ... all he/she needs to learn is the melody, the rest is down to how they present the song.
If you ask each singer to turn up at a 2-hour slot having prepped two songs, you'd better hope they're also a great conversationalist, since you're going to be spending three quarters of the 'audition' just chatting.
You could start the weeding-out process by asking each applicant how many songs they would like to prep. I would discard anyone who only wanted to do two!