Rosh HaShannah is called the birthday of the world. (HaYom haras olam...see machzor mussaf)
However, the pinnacle of creation is Adam, the first man. Therefore, Rosh HaShannah is the birthday of Adam. (the world's birthday is represented by Adam's birthday.)
The first three words of the pasuk (HaYotzer yachad libam...)can be translated: "The One who forms their hearts together (as one). Then the next words (...HaMeyvin el cal ma'aseyhem) says that He understands all their deeds.
Our sages make a drashah on this pasuk: When does Hashem understand all their deeds (meaning judgment)? It is on the day He originally formed their hearts as one. When did Hashem form all human hearts as one? That was when He formed Adam the first man. (In Adam's soul, was contained the souls of all mankind together.) That was the only time it happened, and it happened on Rosh HaShannah.
This seems to be the understanding of the Ritva. He says in his commentary on Shas (Rosh HaShannah 16a) "The one who forms their hearts together..." ..."This means: At the (original) time of His forming them (man)..." see there.
See also the Ran's perush on 16a for a detailed explanation in line with the Ritva. (That our Mishnah means to focus on the day Adam was created, commanded, sinned, and judged; so too, his descendants would undergo judgment on the same day.)