Final answer:
The 'Deny' effect is evaluated first in Azure Policy to ensure non-compliant resources are blocked, taking precedence over other effects such as 'Audit' and 'Append'. The 'Disabled' state is used to stop policy enforcement.
Step-by-step explanation:
In Azure Policy, the order of effect evaluation is critical to understand how policies are enforced within the Azure environment. When a policy is evaluated, the Deny effect is considered first. This mechanism ensures that any resources that do not comply with the policy constraints are blocked from being created or updated. The Deny effect takes precedence over other effects such as Audit and Append because it enforces the actual prevention of non-compliance. Audit effects are then used to report non-compliance without preventing the resource deployment, and Append effects add additional parameters to resource deployments if they are not already specified. The Disabled state is used when you want to cease the policy's enforcement without deleting the policy definition or assignment.