The oe-init-build-env script calls scripts/oe-setup-builddir script inside the Poky directory to create the build directory.

On creation, the qemuarm build directory contains a conf directory with the following three files:

• bblayers.conf: This file lists the metadata layers to be considered for this project.
• local.conf: This file contains the project-specific configuration variables. You can set common configuration variables to different projects with a site.conf file, but this is not created by default. Similarly, there is also an auto.conf file which is used by autobuilders. BitBake will first read site.conf, then auto.conf, and finally local.conf.
• templateconf.cfg: This file contains the directory that includes the template configuration files used to create the project. By default it uses the one pointed to by the templateconf file in your Poky installation directory, which is meta-poky/conf by default.