What does the Old Testament and the New Testament of the Holy Bible say about Knowledge and sin?

Hosea 4:6-7 "[ 6 ] My people are destroyed for lack of knowledge: because thou hast rejected knowledge, I will also reject thee, that thou shalt be no priest to me: seeing thou hast forgotten the law of thy God, I will also forget thy children." [ 7 ] As they were increased, so they sinned against me: therefore will I change their glory into shame."

Why does god make peace and create evil as Isaiah stated?

Isaiah 45:7 "I form the light, and create darkness: I make peace, and create evil: I the LORD do all these things."

Does God judge people according to their work? Yes,

Please see the following verses.

Isaiah 56:1 Thus saith the LORD, Keep ye judgment, and do justice: for my salvation is near to come, and my righteousness to be revealed.

John 16:8 And when he (Comforter) is come, he will reprove the world of sin, and of righteousness, and of judgment:

Revelation 20:12-14 "[12] And I saw the dead, small and great, stand before God; and the books were opened: and another book was opened, which is the book of life: and the dead were judged out of those things which were written in the books, according to their works. [13] And the sea gave up the dead which were in it; ... [14] And death and hell were cast into the lake of fire. This is the second death."

Does Jesus' forgiveness true? No

And Finally, Jesus follows God's judgment regarding people's sin according to their works, and judgement is not determined by Jesus' forgiveness! Please see the last chapter of the New Testament which is Revelation chapter 22 where Jesus says "my reward is with me, to give every man according as his work shall be."

A lot of Christians are good humanitarians and generous, but their own sin makes them believe many things without any good reasons.