Whilst I certainly agree that honesty is by far the best policy, I would have to draw the line at informing my pax that we were going around because I had got it wrong, or for whatever reason was not happy with the approach.
Not through any stubborn pride/presitige etc etc, but simply because pax DO NOT want to hear the man/woman at the pointy end telling them he/she has made a mistake, whilst commendable for your honesty, I am sure this course of action does nothing for the confidence of the average pax. I would prefer to give as little information as possible whilst still informing pax adequately. Possibly something to the tune of
" Sorry for all the noise folks, slight change of plans we're going to do a little more sight seeing for a couple of minutes before we can land, nothing to worry about just waiting for clearance"
Whilst not putting the fear of God into the poor blighters, neither are you deviating from the truth either, because in fact you WILL be waiting clearance to land.