For most university classes I have come across, the professor teaching the class is also responsible for making (and usually grading) the exam, or holding an oral exam. As far as I can tell this is true in most (at least Western) countries.
There are a few exceptions, e.g. some (but certainly not all) universities do not allow the supervisor to be part of the examining committee during a PhD-defense, and many high school educations have a centralised exam at some point.
Does combining "teaching" and "evaluating" in a single person not create a conflict of interest - and why is this so prevalent at universities?
As people were wondering which conflicts of interest I was referring to: all of them :)
I was mainly thinking about the fact that teachers are usually evaluated based on their performance, which is either measured through e.g. student pass rates and/or student evaluations. Both of these provide an incentive for the teacher to make the exam easy to pass, either by making an easy exam or by preparing students on very specific questions in a hard exam.
But there are also arguments to be made that this system is not particularly good for the student-teacher relationship - I personally find it a lot easier to teach and motivate students when I am not evaluating them, because it has more of a "I am helping you to pass the exam", and less of an "learn this or I will fail you" atmosphere.