The effect of lateral boundaries on time-resolved measurements of light transmitted through slabs of finite thickness is considered in the framework of a random walk model of photon transport in tissue. A model for a single lateral boundary is derived from the result obtained previously for an infinite slab by employing a standard technique known as the method of images. The predictions of the model are compared with time of flight data from Monte Carlo simulations (University of Florence) and experiments (University College London) using a homogenous phantom having tissue-like optical properties. Agreements in both cases are very good, indicating that the simple formalism of the random walk model is quite adequate to describe the influence of the side boundaries of the tissue slab on the observed characteristics of the transmitted light. The same methodology is applied to assess the influence of side boundaries on the time-dependent contrast functions observed in time-resolved transillumination experiments when an abnormally scattering and absorbing target is embedded in the slab. The potential use of suggested lateral boundary corrections in optical tomography is briefly discussed.